Germany is reportedly considering banning certain components from Chinese tech giants Huawei and ZTE in its telecom networks, a government source said, in a potentially significant move to address security concerns.

The country's government said it is now carrying out a review of tech suppliers such as China's Huawei and ZTE, whose equipment is used in Germany's 5G networks and warned that if security risks are discovered by early April, use of telecoms components from the firms would be restricted.

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Following the announcement, China's embassy expressed its strong dissatisfaction, commenting that the German government made the decision without any factual basis, and its abuse of state power to intervene in the market in its cooperation with China violates economic laws and the principle of fair competition.

A 2022 report compiled by Danish firm Strand Consult found that 59% of the components that made up Germany's 5G radio access network was supplied by Chinese vendors like Huawei and ZTE.

If the ban is eventually imposed, Germany would become the latest European country to sour its trading relationship with China, joining Britain and Sweden in banning the Chinese companies' equipment in their 5G critical infrastructure.

The U.S. has also banned Huawei and ZTE and placed restrictions on the sale of semiconductors to the telecom giant.